South Korean Prosecutors Raid DSME Offices

DSME shipyard. Photo credit: Lappino

By Kyunghee Park

(Bloomberg) — South Korea’s prosecutors raided the offices of Daewoo Shipbuilding & Marine Engineering Co. as the world’s second-largest shipbuilder tries to raise funds through asset sales to reduce debt.

The raid comes after an audit committee of Daewoo Shipbuilding requested an investigation into two former chief executive officers for alleged mismanagement of the company, the Geojae, South Korea-based shipyard said in an e-mailed response to a Bloomberg News query.

Daewoo Shipbuilding posted its biggest loss last year after write-offs for delayed projects. The company is among shipyards restructuring to raise funds after deliveries of offshore drilling and production units were pushed back, as oil prices that have fallen by half in the last two years crushed demand.

Prosecutors raided the company’s offices in Seoul and Geojae, Daewoo Shipbuilding said. Computer hard drives, account books and documents were confiscated by the officials, Yonhap News Agency reported, citing the Supreme Prosecutors’ Office. A person who picked up a call to the media office of the Seoul Central District Prosecutors’ Office said she couldn’t comment on any investigation by the office.

Daewoo Shipbuilding posted a net loss, excluding minority interest, of 3.19 trillion won ($2.8 billion) in 2015. The company restated its earnings from 2013 on the advice of its auditors to better reflect the write-offs in its financials.

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